What you need to know about event liability cover

The advent of the Safety at Sports and Recreational Events Act (SASREA) firmly places the responsibility on all parties involved to ensure safety at events. According to Steve Levitt of insurance brokerage and risk consultants, Aon South Africa, the distinction between who is responsible is blurred and he believes that all parties should have their own event liability insurance cover in place, whether you are a sponsor, supplier, contractor, event owner, advertiser or events coordinator.

The repercussions of an incident at an event may have an impact on the reputation of all involved, which, if not handled correctly, could affect the sustainability of the business. “Event liability insurance is their first line of defense,” says Levitt, “Whether it’s an intimate gathering of 50 people or a large event of 5,000 plus people, all parties involved need to do a comprehensive risk analysis to identify all possible risks and to ensure that their due diligence is properly managed in every aspect as liability cover is based on negligence that needs to be proven.”

Whilst the SASREA does make public liability insurance cover mandatory, in practice usually only controlling bodies and venue/stadium owners would enjoy public liability cover whilst other stakeholders would, in most instances, either not have public liability insurance or be indemnified by those who do have such cover.

“The SASREA now demands that all parties involved need to take an active role in vetting the planning of events. They can no longer associate their name with an event with no knowledge of the safety and security measures in place. Sponsors, as stakeholders in an event, can be drawn into a suit alongside the event organiser, venue owner and others. It is essential that all parties take a pro-active approach to ensuring that certain minimum standards are met around the planning and organising of any event and ensuring compliance with SASREA,” Levitt explains.

According to Aon, SASREA has a very similar effect as the Consumer Protection Act. In terms of the CPA, where damages arise as a result of defective products, consumers can seek recourse against any one of the parties in the supply chain, be it the manufacturer, the wholesaler or the retailer.

“Similarly, in terms of the SASREA, in the event of individuals being injured at events, they can choose to seek recourse against any of the stakeholders in the event, be that a sponsor, a supplier or indeed an advertiser and hold them jointly and severally liable for any damages and civil liability,” says Levitt.

What are the implications of joint and several liability?

All parties involved in an event will be jointly and severally liable in the event of any civil liability arising at any given event. It is a form of liability used in civil cases where two or more parties are found liable for damages. An affected third party can seek payment of the entire judgment from any of the parties deemed to be ‘jointly and severally liable’. If any of the defendants are unable to pay the full judgement award, the other defendants will have to make up the shortfall.

In the context of SASREA, although it provides for various duties and obligations on each of the entities, in the event of a disaster occurring and injury to individuals, those injured parties may choose to sue any of the entities as reflected in section 4 of the SASREA whether or not there was fault on the part of that party, as the SASREA has placed a burden on all entities to ensure safety and responsibility at events.

“Most crucially, sponsors should also ensure that they have adequate events liability in place with an insurer who is aware of their exposure in this regard, and not rely on a standard business public liability policy. A good place to start would be to provide your insurance broker with a copy of any legal contracts you have in place in terms of an event, to ensure that any provisions in your contract are not in contravention of the terms and conditions of your liability cover,” he adds.

“This is where the true value of a professional broker comes to the fore, in evaluating your business exposure to a potential liability claim, ensuring that your contracts and insurance provisions are not in contravention of any clauses, and that the appropriate liability insurance covers and sums insured will adequately mitigate the risk,” he says.